Digital transformation is a daunting task for any organization. More often than not, the initiatives suffer serious delays, setbacks and can even lead to failure. Digital transformation is both an art and a science … the same approach cannot be applied to all companies given that every company has different challenges and goals.
What is Digital Transformation?
Put simply, digital transformation is the digitization of certain processes within an organization that may have been manual or inefficient. Digital transformation is not a one size fits all process and can range in complexity depending on the organization. It can be the rollout of a digitization strategy in a single department or it can be an enterprise-wide change.
A transformation is entirely based on where a company is within its’ digital lifecycle. Some companies are at the very beginning and others are more advanced. Most often, digitization includes the implementation of a whole new suite of applications or improvements to older systems.
Some may argue that digital transformation is not a critical component of an organization and that it is not easy to track the return on investment post implementation. In order to properly evaluate ROI, an organization must have the right KPI’s in place to gauge performance. Most companies struggle with digital transformation due to their lack of framework development for measuring success.
Digital KPIs have to be created in an efficient and straightforward manner with buy-in from all stakeholders, not just the IT departments. It is important to note that KPIs that work for a particular organization may not work for another. The digital transformation KPIs should be understood by all relevant departments (IT, marketing, finance, etc.), and should be well documented with transparency, accountability and buy in from stakeholders.
The success of digital transformation will be determined by the formulation of well-defined KPIs. It is essential to monitor the progress and indulge in course correction to ensure that your investment into such a digitization process is justified. The absence of clearly structured transformation measure may lead to the overall failure of such an initiative.
Before setting internal KPIs, you must analyze your organization and where it currently stands.
Identify the Following
- Market positioning
- Marketing budgets across digital channels
- Level of digital maturity internally – training and experience of partners, employees and management
- Current revenue breakout and future goals across digital channels
- Inter-dependencies of company departments in digital initiatives
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1. Customer Focused KPI’s:
- New customer acquisition rate
- Lifetime value of customers
- Improved user experience (score)
- Increase in customer engagement across digital channels
- Reduced time to market for new products
- Changes in customer/user behavior
2. Business Focused KPI’s
- Innovation projects being implemented across an organization and the level of success
- New products or services being launched vs. core business (as a percentage of revenues)
- Business models adopted for various markets
- New applications, technologies and innovative solutions being applied to reach digital goals
- Adaptation to new situations or markets
Be Proactive When Navigating Digital Transformation
Digital transformation is a choice and organizations must be ahead of the curve when it comes to spotting trends and adapting their existing frameworks. If successfully calculated and implemented, a company can create new opportunities and develop deeper connections with customers across all major touchpoints. If you are seeking a partner to help you navigate the process, set foundational KPIs and execute a digital transformation initiative, Transcend Digital is here to support.